TL;DR

Iran halts IAEA inspections; UK gilts, sterling slide on fiscal doubts; US eases China tech curbs.

Highlights

• Iran suspends all IAEA nuclear inspections after US-Israeli airstrikes; US and EU warn of increased nuclear risks and possible UN sanctions snapback1.
• Pentagon says June strikes set Iran’s nuclear program back by up to two years; IAEA notes Iran could resume enrichment quickly14.
• Ukraine faces a US pause on key weapons shipments amid low US stockpiles; European allies assess options to fill the gap as Russia intensifies attacks2.
• UK gilts and sterling drop sharply after PM Starmer hesitates on Chancellor Reeves’s future and Labour dilutes welfare reforms, raising fiscal credibility concerns5.
• US lifts chip-software and ethane export curbs on China after a rare-earth supply deal, easing some tech and energy trade tensions ahead of July tariff deadlines3.
• Foxconn recalls 300+ Chinese engineers from India, slowing Apple ’s iPhone 17 production ramp-up and reflecting Beijing’s tighter control on tech labor outflows6.
• BYD halts Mexico EV plant plans due to US tariff uncertainty under Trump; GM shifts production to the US amid auto supply chain disruptions7.
• EU to propose a new joint bond issuance mechanism in its next budget, reviving elements of pandemic-era collective borrowing8.
• South Korea warns US tariff talks remain difficult ahead of July 8 deadline; Seoul signals expansionary fiscal policy and aims to revive manufacturing and the KOSPI15.
• BlackRock considers selling its Aramco gas pipeline stake back to Saudi Aramco, potentially reducing exposure to Saudi midstream assets12.
• BlackRock’s Bitcoin ETF now generates more fee revenue than its S&P 500 tracker, highlighting strong institutional demand for crypto exposure19.
• Israel’s Likud ministers urge Netanyahu to annex the West Bank by July 27; Israel opens back-channel talks with Russia on Iran and Syria1020.

Commentary

Geopolitical risk remains elevated, with the Middle East at the forefront. Iran’s suspension of IAEA inspections in response to recent US-Israeli strikes1, combined with the Pentagon’s assessment of a two-year setback to Iran’s nuclear program14, raises the likelihood of renewed sanctions and further volatility in energy markets. Israel’s internal debate over West Bank annexation10 and its quiet engagement with Russia on regional security20 add additional uncertainty to the outlook for both commodities and regional assets.

In Europe, UK assets came under pressure as political uncertainty resurfaced. The sharp moves in gilts and sterling reflect market concerns about fiscal discipline after Labour’s welfare U-turn and ambiguity over Chancellor Reeves’s position5. Meanwhile, the EU’s plan to revive joint bond issuance could provide a new crisis-funding tool and support peripheral spreads, but investors will watch for details on trigger conditions and governance8.

US-China trade relations saw a modest thaw, with the rollback of chip-software and ethane export curbs following a rare-earth supply agreement3. While this is a positive for tech and energy supply chains, Foxconn’s recall of Chinese engineers from India6 and BYD’s halted Mexico expansion7 underscore ongoing supply chain realignment and persistent policy risk for global manufacturers, especially in electronics and autos.

Elsewhere, BlackRock ’s Bitcoin ETF surpassing its S&P 500 tracker in fee revenue highlights sustained institutional demand for crypto19, even as the IMF blocks subsidized crypto mining in Pakistan16. In Asia, South Korea’s challenging tariff talks with the US and its push for fiscal stimulus signal potential volatility for regional equities and currencies, especially with the July 8 deadline approaching15.

Traders should monitor Middle East headlines for energy and risk sentiment, UK fiscal signals, EU bond issuance details, and US tariff policy shifts. Supply chain developments in tech and autos, as well as flows into thematic ETFs and crypto, remain key cross-asset themes.